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This paper estimates the effect that successful cocaine interdiction policies in Colombia have had on violence in Mexico. We propose a simple model of the war on drugs that captures the essence of our identification strategy: aggregate supply shocks affect the size of illegal drug markets, which then increases or decreases violence. We estimate the effect of the interaction of cocaine seizures in Colombia with simple geographic features of Mexican municipalities. Our results indicate that aggregate supply shocks originated in drug seizures in Colombia affect homicides in Mexico. The effects are especially large for violence generated by clashes between drug cartels. Our estimates also show that government crackdowns on drug cartels might not be the only explanation behind the rise of illegal drug trafficking and violence observed in the last six years in Mexico: successful interdiction policies implemented in Colombia since 2006 have also played a major role in the worsening of the Mexican situationduring Calderon's sexennium.

Speaker Bio:

Daniel Mejia is Associate Professor in the Department of Economics and Director of the Research Center on Drugs and Security (CESED) at Universidad de los Andes in Bogota, Colombia, where he has taught since 2006. He received a BA and MA in Economics from Universidad de los Andes and a MA and PhD in economics from Brown University. Prior to joining Universidad de los Andes he worked as a researcher at the Central Bank of Colombia and Fedesarrollo. Daniel he has been actively involved in a research agenda whose main objective is to provide an independent, economic evaluation of anti-drug policies implemented under Plan Colombia. His academic work has been published at the Journal of Development Economics, the European Journal of Political Economy, Economics of Governance and Economia: Journal of the Latin America Economic Association. In 2008 he was awarded Fedesarrollos´s German Botero de los Ríos prize for economic research. Also, in 2008, 2010 and 2012 he was awarded with research grants from the Open Society Institute for the study of anti-drug policies in Colombia. Daniel, together with Alejandro Gaviria, recently published the book “Políticas antidroga en Colombia: éxitos, fracasos y extravíos” (Anti-drug policies in Colombia: successes, failures and lost opportunities) at Universidad de los Andes, in Bogota. Between 2011 and 2012, Daniel was a member of the Advisory Commission on Criminal Policy and more recently he is the Chair of the Colombian Government´s Advisory Commission on Drugs Policy.